Target’s revenue at stores open at least a year up in Sept., but fall short of estimates

Target September sales fall short of estimates

MINNEAPOLIS — A key revenue measurement at Target Corp. rose 1.3 percent in September, missing Wall Street’s expectations.

The results in a month that was relatively positive for most retailers represent a setback in Target’s quest to turn around sales with a focus on groceries and marketing that emphasizes low prices. Shares fell 52 cents to $53.55 in premarket trading.

Analysts surveyed by Thomson Reuters expected revenue at stores open at least a year to rise 1.9 percent for the cheap chic retailer.

This figure is a key indicator of a retailer’s health because it measures results at existing stores rather than newly opened ones.

Total sales for the five weeks ended Oct. 2 rose 3.1 percent to $5.56 billion.

The chain said Thursday that grocery, beauty and health care sales were strong, but that its monthly performance was near the low end of expectations. Target has remodeled stores to stock more food to lure shoppers who are sticking to basics in the weak economy. The company plans to finish its remodeling program this month.

For the quarter to date, revenue at stores open at least a year rose 1.6 percent, while total sales increased 3.3 percent to $10.59 billion.

Year-to-date revenue at stores open at least a year climbed 2.1 percent, with total sales up 4.3 percent to $40.87 billion.

Like many retailers, Target faces challenges as Americans deal with high unemployment.

While Target saw revenue rise in the latest quarter, the chain didn’t generate enough business this spring to get back to 2008 levels on a per-store basis. But company officials reiterated last month that they are counting on driving traffic this holiday season and beyond with two key initiatives: a 5 percent discount for its credit card holders which will be rolled out Oct. 17 and heavier emphasis on food.

Target’s REDcard rewards program gives the 5 percent discount to customers who pay with a Target credit card, Target Visa or Target debit card.

Target comes into the holiday period with advantages over chief rival Wal-Mart Stores Inc., which has suffered through five straight quarters of declines in revenue at stores open at least a year.

Wal-Mart had benefited at the beginning of the Great Recession as shoppers traded down to cheaper stores, but Wal-Mart’s more blue-collar customers have had a harder time making due from paycheck to paycheck. Target has benefited from sweeping changes it made in its stores and its emphasis on low prices in its ad campaigns. Furthermore, its target customers also have more money than Wal-Mart’s.

Target, based in Minneapolis, has 1,752 stores in 49 states.